Despite the ever-increasing demands and mandate given to the UN to be the key global driver for development, resources available to implement the development agenda have become more constrained and unpredictable. While the UN is getting better at tackling more and more development issues within the multilateral framework, there is no link between multilateralism, agreed goals and the availability of funding. This means many of the goals and strategies agreed upon at the multilateral level, fail to operationalize and deliver results in absence of funding. But this was not always so.

United Nations: New Issues, New Ideas, Not Enough Financing

In 1945 when the world was emerging from devastation of World War II, the United Nations (UN) came into existence. The work of the UN was organised around four pillars: peace and security, development, human rights, and humanitarian relief. The founders of the UN understood that to save succeeding generations from the scourge of war, all the pillars were imperative. The Article 55 of the UN Charter mentions “With a view to the creation of conditions of stability and well-being which are necessary for peaceful and friendly relations among nations … the United Nations shall promote: higher standards of living, full employment, and conditions of economic and social progress and development …”. And it is work of the UN to bring all the pillars together.

Emergence of New Issues

Regrettably, this is not the case with the UN today. While peace and security issues have dominated the history and mandate of the UN, work on development pillar is lagging. And there has been a gradual fragmentation of the UN Development System (UNDS) and its interventions. This has come at a very inopportune time, when the world is facing new challenges brought about by globalisation, financial crisis and increasingly because of climate change, while the ongoing challenges of poverty, disease, and environmental degradation continue to afflict billions of people in developing countries. While many of these are problems without passports – affecting everyone, their impact is felt more severely by the poor and the marginalised as they do not have any economic and social safety net.

While UN has the capacity to handle humanitarian crisis brought out by natural disasters, it is ill-equipped to handle similar humanitarian crisis brought about by financial crisis and climate change which are leading to massive unemployment, especially among the youths, large scale migration and social unrest. The often simplistic approach followed by the United Nations of putting more aid at one end and expecting desired outcomes at the other is not working. Added to that we are witnessing a rapid decline of aid as a driver of development, and worker remittances and royalties from oil are dwarfing aid flows.

Link between Multilateralism, Agreed Goals and Financing

Despite the ever-increasing demands and mandate given to the UN to be the key global driver for development, resources available to implement the development agenda have become more constrained and unpredictable. While the UN is getting better at tackling more and more development issues within the multilateral framework, there is no link between multilateralism, agreed goals and the availability of funding. This means many of the goals and strategies agreed upon at the multilateral level, fail to operationalize and deliver results in absence of funding. But this was not always so.

At the time of formation of the UN, the prevalent thinking was that the UN has a lot of work ahead in the area of international cooperation. During the mid-1970s and early 1980s, the UN regular budget witnessed a rapid growth. The key question for UN was not financing but if it had the capacity to deliver. The situation changed from mid-1980s until the turn of the millennium. During this time, the budget growth was relatively flat precipitated by the global financial crisis, and because of the United States insisting on zero growth in the regular budget and withholding funds. From then onwards, financing of the UN and the development activities became a key challenge.

New Development Ideas and Platforms

The financial austerity calls for newer ideas, solutions and delivery mechanisms to tackle development issues. And the UN has risen to the challenge and put forward new ideas and agenda on the global forum. These include the human development indices, global public goods, millennium development goals (MDGs), focus on gender equality, and elevating climate change and sustainable development to the highest political agenda.

From a convening role, followed by a normative role, the UN now needs to move to an integrated policy role. This would represent a huge transition – from “UN as one” to “governments as one”. The UN may have embarked on this path through the MDGs which brought together member governments to align their development objectives and make coordinated efforts to cut extreme poverty by half by 2015.

The Millennium Declaration which was adopted by 189 world leaders acknowledged the need for good governance at the international level and on transparency in the financial, monetary and trading systems. And committed to an open, equitable, rule-based, predictable and non-discriminatory multilateral trading and financial system. While the MDGs were distilled from this declaration, a lot more remains to be extracted, especially the call for policies and measures at the global level, which correspond to the needs of developing countries and implemented with their participation. This would be especially useful as the deliberations on the post-2015 global development framework move to the intergovernmental phase.

We are also witnessing emergence of new platforms and alliances both within and outside of the UN. Some of the alliances such as Brazil, India, China and South Africa (BICS) represent aspirations of the emerging powers. It remains to be seen how emerging powers will approach multilateralism. To start with, they want greater influence in the UN, a reformed development system, and more funding for the UNDS. They are also establishing direct partnerships with different UN agencies, such as UNIDO, FAO, UNDP and others. The trend is an encouraging one, as their growing engagement with the UN will strengthen and renew the relevance of the global body.

Emerging countries are being asked to contribute more financing to the UN development activities, but they are hesitant to share greater responsibilities without corrections in underlying power asymmetries in the global governance institutions. Greater role in multilateral cooperation should not come through co-option but as a result of independent strategy, vision and interests of member countries. This may induce much needed reforms in the structure of UN to make the organisation more representative of the world as it exists today. The global community seems to respond favourably to the need for this change. In the 2013 FUNDS expert survey on emerging economic powers, 63 percent of all respondents consider increasing leverage among emerging economic powers as an opportunity and believe they will play a more important role in the future.

Does Strategy Comes First or Funding?

When the UN was established it was not envisaged that the organization would become a major player in the delivery of operational activities for development. Today the UN that engages in development activities in developing and in-transition countries includes more than 30 agencies. These agencies have separate governance, financing and boards, and often overlapping agenda which leads to not enough focus and duplication of activities.

Many of the “coherence” challenges face by the UN can be traced back to the earlier decades when the response to tackling a new issue often meant setting up a new institution. The 60s and 70s saw emergence of many new UN entities – WFP (1961), UNICEF (1964), UNCTAD (I964), UNDP (1965), UNIDO (I967), UNFPA (1969), UNEP (1972), WIPO (1974), WTO-Tourism (1975) and IFAD (1977). In 1965, UNDP was established to coordinate funding for technical assistance provided by other UN entities but this centralized approach to funding through UNDP was abandoned in early 1990s when UNDP transformed itself into a substantive organization. This meant that the specialized agencies had to start mobilizing resources directly from donors, leading to growth in non-core funding and further fragmentation of the UN system.

Each of the UN organisations has to raise funds from wherever they are able to. The pressure to raise funds mean that they are never in a position to say “no” to new donor financing – even when it does not fit into their existing set of activities. Instead of refusing funding, they end up accommodating the interests of donors. This has led to wayward growth in small programmes, lack of coherence, dilution of core mandate and capacities, and precedence of financing over strategy.

There has also been a rise in non-core funding by the donors against assessed contributions. Donors prefer to apply earmarked funds through the UN because of the legitimacy and universality afforded by the global body. While UN agencies may get funded through these means it reduces their role to development contractors. Whether the funds come from core or non-core source, there is no surety for the next year. Accountabilities are affected as there is a pressure to raise funds from different sources. For instance, country offices often prefer non-core funding channels for their projects in order to bypass closer headquarters scrutiny.

Increasing Role in Fragile States

With more countries taking off into middle income status, and many alternatives to UN development assistance, the UN’s role in fragile states has become its main focus. More than 40 states around the world are currently classed as ‘fragile’ and require greater support and financing so that they do not regress into ‘failed’ states. But for the UN to deliver results, the four pillars need to come together – there can be no development without security.

The fragile states are systematically undermined by crises in the areas of food, water, energy and climate and security alone cannot bring development. In many war-torn societies, countries have ended up keeping peace because of aid but most remain low in human development indices.

UN should scale down its bread-and-butter presence in middle- and upper-middle income countries. If it does so, it will permit a reallocation of resources to the task of building capacity in low-income and fragile states.

Effectiveness of the United Nations

There is a vicious cycle where lack of assured financing is making the UNDS less focused and has to accommodate interests of multiple donors and service plethora of small partnerships and funds. This leads to incoherence between the agenda setting functions and results delivery mechanisms of the UN. This in turn affects its ability to deliver, and the UN is losing its policy space and an independent voice. The problem is replicated at the country level too, where it is not possible to effectively implement strategies with different funders and implementation partners. However diversity in sources of funding of UN is the new reality and the UN has to get used to it.

An important question emerges – is United Nations effective in reducing poverty and bringing development? One could measure the success of the United Nations in terms of its convening power on development issues, in shaping global opinion and views, in upholding global conventions, and its contribution to coherence of global order.

The current evaluation systems within the UN do not bring out its unique contribution to the development agenda as they are focused on inspection and auditing. Moreover, the financial woes of UN agencies have made forging partnerships rather than outcomes as a substitute for progress and success.

Reform of the UN is needed to make it more effective. And it is a continuous process brought about by new circumstances and stakeholders. While calls for reform started almost as soon as the global body was born, time has shown that revolutionary change in the system is not possible, nor can it be driven by crisis only, as we have seen in the case of financial crisis and the climate crisis. But even incremental change has become urgent.

Professional Summary

Prior to his role as Associate Director, FUNDS Project (New York / Geneva), Vikas Nath was the Special Advisor to the Executive Director and Head (Media and Communication), South Centre in Geneva, and before that as Policy Analyst with UNDP in New York. He has also worked with Ministry of Environment and Forests, Government of India.

Mr. Nath has founded number of global enterprises, networks and forums. He has worked in over 60 countries on agriculture, environment, development, ICT, e-governance and south-south cooperation.